It amazes me how many Americans there are out there who have no clue what elderly life was like for most Americans before SS became available. Most people worked till they dropped dead on the job. SS gave people a chance to retire with some dignity and security. The selfishness and the hubris of those who think America will just be fine if we let Wall Street have our SS to create financial security with is so swollen it boggles my mind. The fact of the matter is most Americans have no clue how to invest, and that is the precise reason we need SS. It is a safety net that prevents massive amounts of desparation, which eventually leads to people doing less than savory things to survive. Much of it criminal. Anyone who thinks Wall Street is the answer for most Americans has their head up their wazoo. Thanks to Wall Street and the banksters we are where we are now. Millions of Americans lost their retirements 5 years ago when these hucksters stole it from them, and thank god they still have some SS money, because without it, it would be hard to imagine the condition many Americans would find themselves in begging you for help.

harrimar wrote:AS Krugman said on Sunday to Will- upper middle class people, who have good health care are living longer, but lower middle class folks are not living longer, so they will suffer with raising the eligibility age. Much more fair is to raise the cap from $106,000 to making all pay. That would keep SS solvent for many many years. And not take it out on less advantaged, like most of these ideas seem to want to do.

Everyone already pays up to that $106,000 amount. What people like you who advocate for raising the cap always seem to forget is that if you raise the cap you also have to raise the payouts. As it stands, people that earn more than $106K/yr only pay FICA taxes (SS) up to that amount and thereby they only receive payouts based on their contributions.

Or are you suggesting that people who earn more than $106K/yr should pay into FICA/SS but not collect? Another wealth redistribution program? Is that what you want?

"The Draconian (Draco c. 621 BC) laws, traditional Athenian law code, were noteworthy because they were written in blood and death was prescribed for almost all criminal offenses."

thebear1 wrote:It amazes me how many Americans there are out there who have no clue what elderly life was like for most Americans before SS became available. Most people worked till they dropped dead on the job. SS gave people a chance to retire with some dignity and security. The selfishness and the hubris of those who think America will just be fine if we let Wall Street have our SS to create financial security with is so swollen it boggles my mind. The fact of the matter is most Americans have no clue how to invest, and that is the precise reason we need SS. It is a safety net that prevents massive amounts of desparation, which eventually leads to people doing less than savory things to survive. Much of it criminal. Anyone who thinks Wall Street is the answer for most Americans has their head up their wazoo. Thanks to Wall Street and the banksters we are where we are now. Millions of Americans lost their retirements 5 years ago when these hucksters stole it from them, and thank god they still have some SS money, because without it, it would be hard to imagine the condition many Americans would find themselves in begging you for help.

FDR's original concept for Social Security was a shared responsibility and also a shared deployment of people's savings between a government program, like SS has become completely, and a private account, most like an annuity. Neither the government or the private sector is without sin or should be trusted 100%. FDR was right and it was Pres Bush43 that knew that and wanted to actually go back to FDR's original blueprint for Social Security by allowing younger workers to take a portion (some % that can be agreed upon) of THEIR MONEY and putting it in to a conservative and guaranteed investment instrument for retirement, like an annuity.

I won't bother with links and references, as you can research all of this on your own. But it just makes sense to not put all of your eggs in any one basket - either any type of investment, or the private sector, or even the government. Spread it out and take some ownership of your own future. There is no reason we should not be teaching financial literacy in the public schools. Since government has a monopoly on delivering education in this country, whose fault is it that after almost 80 years since SS was created most Americans can't balance their checkbook or tell you the difference between a stock, a bond, an annuity, or a commodity? How can people take control of their lives when they are not taught how? Is this not taught by design? You decide.

"The Draconian (Draco c. 621 BC) laws, traditional Athenian law code, were noteworthy because they were written in blood and death was prescribed for almost all criminal offenses."

MJCZ wrote:Everyone already pays up to that $106,000 amount. What people like you who advocate for raising the cap always seem to forget is that if you raise the cap you also have to raise the payouts. As it stands, people that earn more than $106K/yr only pay FICA taxes (SS) up to that amount and thereby they only receive payouts based on their contributions.

Or are you suggesting that people who earn more than $106K/yr should pay into FICA/SS but not collect? Another wealth redistribution program? Is that what you want?

With the 106K cap, SS is not much of redistribution program, albeit a horrible investment. It is funny how people think they are getting something for free but the 106K cap makes SS a tax and bad investment more than a freebie. I have never done an exact breakout of pay-in versus pay-out, so it is unclear who gets the short end of the stick? Probably all of us, while the gov benefits.

Before any "fixes" are applied to Social Security, a couple of realities need to be acknowledged:1) SS is not a trust fund--it is a TAX that pays out current obligations to people who are no longer financially contributing to the system. That makes it a welfare program, and one that people feel they are entitled to, to boot, regardless of the fiscal realities.2) Any surplus in SS is shifted to bonds that only the Treasury can purchase--in other words, IOUs. Whenever those bonds are redeemed, the Treasury has to issue a separate, interest-bearing bond to pay for it. So the Treasury actually ends up incurring MORE debt to pay off SS bonds (the cost of the bond plus interest over the life of the bond), increasing our Historical Debt Outstanding even further.

Up until now, the SS program has relied on exponential growth in population and inflation to cover its obligations. With labor participation rates at historic lows, the fundamental weakness of the program has been exposed--if people aren't working, then SS doesn't get funded. An increase in the tax rate or elimination of the cap limit may alleviate this for a time, but eventually the math will catch up to the can that's been kicked down the road.

Elimination of the income cap sounds nice, but the fact of the matter is that by eliminating the cap, it will obligate SS for greater outlays down the road, with no guarantee that the funding will be available once those greater outlays come due (a presumption that "things will work out because they always have" is magical thinking and will not prepare society for potential breakdowns). The whole point of the cap is that people who make over $100K a year should have the means to save for their own retirement--the cap allowed them to contribute to the late-life well-being of their fellow citizens and add a bit of supplementary income in retirement without overburdening the obligatory payouts of the whole system.

Furthermore, Obama extended the payroll tax cut (and the Bush-era income tax rates) under the presumption that the money previously allocated to SS and Medicare was needed more for people's everyday living expenses than it was for these welfare programs, so by this logic, raising the payroll tax will simply add a financial burden to the working classes that they can't afford right now.

"People usually get what they want, and if they are disappointed in what they end up with, it is usually because they were not careful about what they asked for."

MJCZ wrote: FDR was right and it was Pres Bush43 that knew that and wanted to actually go back to FDR's original blueprint for Social Security by allowing younger workers to take a portion (some % that can be agreed upon) of THEIR MONEY and putting it in to a conservative and guaranteed investment instrument for retirement, like an annuity.

Show me an annuity with a total guarantee, and I'll show you the Government backing it up somewhere.

There are no guarantees. The Government backing something up is as close as it comes.

Red Rocks Rockin wrote:Before any "fixes" are applied to Social Security, a couple of realities need to be acknowledged:1) SS is not a trust fund--it is a TAX that pays out current obligations to people who are no longer financially contributing to the system. That makes it a welfare program, and one that people feel they are entitled to, to boot, regardless of the fiscal realities.2) Any surplus in SS is shifted to bonds that only the Treasury can purchase--in other words, IOUs. Whenever those bonds are redeemed, the Treasury has to issue a separate, interest-bearing bond to pay for it. So the Treasury actually ends up incurring MORE debt to pay off SS bonds (the cost of the bond plus interest over the life of the bond), increasing our Historical Debt Outstanding even further.

You would have to analyse how much you contributed, compounded by prevailing investment return rates and then compare that to the payout you receive to determine if it is a tax or welfare benefit. This calculation would have to be per individual to be accurate.

One thing is for sure, every person has 12% of 106K confiscated, therefore the more your income is above 106K, the lower your S.S. tax rate. An adjusted income of $1M only pays a 1.2% S.S. tax rate. S.S. is 1 of few regressive tax structures, why egalitarian communist support it is beyond me, unless they are duplicitous or ignorant?

Regardless of who pays what, I am sure the government squanders most of it. Besides, who wants to wait till 65, by then you are dead or physically/mentally broken.

Silverspruce wrote:The only "fix" Social Security needs is for politicians in D.C. to keep their dirty hands off the trust fund and stop spending it for everything else. As for AARP, remember they stand to make over a billion dollars from changes they advocate to the system. AARP is nothing but a bunch of political prostitutes and insurance salesmen masquerading as "champions" of the elderly.

You do realize that the trustees say it's the trust fund -- including all the money diverted to the general fund -- that will be exhausted in the 2030s?

“Inflation does not appear to be monetary base driven,” -- Arthur Laffer 01/03/2014

Silverspruce wrote:The only "fix" Social Security needs is for politicians in D.C. to keep their dirty hands off the trust fund and stop spending it for everything else. As for AARP, remember they stand to make over a billion dollars from changes they advocate to the system. AARP is nothing but a bunch of political prostitutes and insurance salesmen masquerading as "champions" of the elderly.

Too late, the "trust fund" is gone. People needed to speak up when it was happening. Moral of the story, don't trust the government with any more of your money than absolutely necessary. And it is not necessary for them to "manage" our retirement and old age health care plans for us. Social security and Medicare are really just government control of the elderly. Once they've got your money, they have the control. Same way that welfare and Medicaid are government control of the poor. Now Obama wants to start getting control over everyone else in between with Obamacare. We need to just start saying "no!"

As individuals we may not manage our money perfectly, but we do a heck of a lot better job than any government bureaucrat ever could.

So you're predicting we will default on those bonds held by the SS Trust Fund?

“Inflation does not appear to be monetary base driven,” -- Arthur Laffer 01/03/2014

OldProvit wrote:Raise the cap. It was raised often as necessary during my working life including ten or so times during the Bush years and I don't ever recall the kind of outrage we're being subjected to by these extremist Norquistian lunatics that seem to have wormed their way to the surface lately to attack anything and everything in our society. For example calling Social Security a "Ponzi Scheme" is disingenuous at best and ignorant or dishonest at worst. Nuts.

You are ignorant about the history of SS. The history of SS involves many increases in benefits long before payroll tax increases. Early recipients (including many greatest generation retirees) earned large surpluses due to this practice. Taxes were low for the early generations and benefits escalated. SS like Ponzi schemes, has no assets in which to pay promised benefits.

It is disingenuous to call SS a Ponzi scheme. Ponzi never foresaw the ability of government coercion to create a scheme and to compel individuals to remain in it. Calling SS a Ponzi scheme is an insult to Ponzi's good name. Ponzi had assets and aspirations to invest assets. He obviously over promised benefits. His original idea of an arbitrage play on international postal coupons was never realized. Ponzi was wildly popular at the time of his arrest.

If SS is not a generational pyramid scheme, why are most individuals compelled to participate? If there is confidence in the approach, individuals would participate voluntarily. However, you know that SS would collapse overnight if it became voluntary because the public rightfully understands that it is unstable.

There goes the ConservativeProf on his regular tirade. First the "Ponzi" scheme, by his definition, every insurance company is a "Ponzi" scheme. (Do they put your money aside to pay your claims, or do they pay it out of incoming premiums, mostly from others?) But somehow he never calls them that.

But then again the ConservativeProf has been preaching doom and destruction for oh, so long, it is a pretty safe bet to not only disbelieve what he says, but to believe the exact opposite. Don't get him started on the hyperinflation we should have been experiencing in the last two years!!!

Silverspruce wrote:The only "fix" Social Security needs is for politicians in D.C. to keep their dirty hands off the trust fund and stop spending it for everything else. As for AARP, remember they stand to make over a billion dollars from changes they advocate to the system. AARP is nothing but a bunch of political prostitutes and insurance salesmen masquerading as "champions" of the elderly.

You do realize that the trustees say it's the trust fund -- including all the money diverted to the general fund -- that will be exhausted in the 2030s?

Yeah, and then there will be enough money coming in to pay for 3/4 of the outstanding claims.

Find an annuity that could do that. In Colorado if an insurance company goes bankrupt, you are only going to get at max $100,000 from any annuity you had with them, and that is because the State backstops them like the FDIC does banks.

Silverspruce wrote:The only "fix" Social Security needs is for politicians in D.C. to keep their dirty hands off the trust fund and stop spending it for everything else. As for AARP, remember they stand to make over a billion dollars from changes they advocate to the system. AARP is nothing but a bunch of political prostitutes and insurance salesmen masquerading as "champions" of the elderly.

Too late, the "trust fund" is gone. People needed to speak up when it was happening. Moral of the story, don't trust the government with any more of your money than absolutely necessary. And it is not necessary for them to "manage" our retirement and old age health care plans for us. Social security and Medicare are really just government control of the elderly. Once they've got your money, they have the control. Same way that welfare and Medicaid are government control of the poor. Now Obama wants to start getting control over everyone else in between with Obamacare. We need to just start saying "no!"

As individuals we may not manage our money perfectly, but we do a heck of a lot better job than any government bureaucrat ever could.

So you're predicting we will default on those bonds held by the SS Trust Fund?

The bonds are non negotiable Treasury notes so there is nothing to default on. The bonds are issued by one part of government and given to another part (SSA). The bonds and the associated trust fund are just accounting frauds that you seem unable to understand.

Politicians are not going to stop sending SS checks. In this sense, the benefits are guaranteed although Congress is contemplating schemes to tax the benefits so heavily that the benefits will essentially not exist for some. I have read about various schemes that Democrats have contemplated regarding taxation to effectively reduce benefits. I have no idea if these schemes will be enacted but they represent the method in which Congress may stealthly eliminate benefits.

Beside the possibility of taxation schemes, the benefit checks are guaranteed by the political impossibility of reducing benefits. However, Congress cannot guarantee the value of the benefits. Receiving benefit checks in a worthless currency will not fill your stomach. Europe is a clear signal about the results of unsustainable government spending. The US dollar is not too big to suffer major devaluation. There has been lots of talk to eliminate the dollar as the world's reserve currency, the mechanism providing the illusion of free government spending. After the mess in Europe plays out, I see the same process coming here except with much worse results. Government spending including SS will be substantially reduced. The only question is the source of the reductions, internal or external.Internal reductions are preferred because there is some control over timing and subject. External reductions through a sinking dollar will bring chaos. the denial by most posters indicates that external reductions will be the source of the reductions in government spending.

To 'fix' social security should be simple. First, adjust the full retirement age to average longivity. This may mean women have to work longer than men since they tend to live longer. Second, take off the cap, or at least make it much higher, so we have more money coming in. Third, end the 2% tax cut so we get back to 'normal'.

If the original Roosevelt formula were used the retirement age for SS today would be at about 78. In the 1930s the average life span for men was 59 and for women at was 61. Social Security was meant to be a supplement for the elderly who were otherwise assumed to have assets and a private pension. Interestingly enough, farm workers and domestics were left out of the original program. It was solely for industrial workers. It was in the 60s that the program mutated into a total retirement income, especially for the poor.

ConservativeProf wrote:Greece is a clear signal about the results of unsustainable government spending, when that spending is made using a foreign currency.

Fixed that for you.

Do you mean that the dollar's status as the world's reserve currency can withstand incredible levels of money supply increases? Do you mean that the dollar will not be devalued when it loses its status as the world's reserve currency? Do you mean that our standard of living will not fall when foreign goods become very expensive, espcially commodities?